Hydrogen stock boom limits M&A activity

Eye-watering valuations mean making acquisitions or even taking stakes in hydrogen-focused companies are challenging

Hydrogen companies have been attracting the attention of both investors and energy firms seeking a stake in the sector. Share prices have boomed in 2020 while the wider market, and especially oil and gas valuations, has languished, which is working against corporate activity. “The challenge for M&A is spectacular valuations, so it is hard to find a metric that looks in any way sensible,” says Sean McLoughlin, Emea head of industrials research at bank HSBC. “In a very thematically driven market, hydrogen ticks an awful lot of boxes. But technology acquisitions in the sector are very expensive because you would have to likely put up an amount well in excess of the market cap in order to co